Tesla planning to launch new manufacturing plant in China

With China vigorously pursuing a policy to increase the production of electric vehicles to help tackle the high levels of pollution, electric car manufacturer Tesla is preparing to launch a new manufacturing plant in Shanghai.

Tesla, which is planning to produce cars for the mass market, tripled its sales in China to more than a billion dollars since 2015.
Expansion into the Chinese market, which is the largest e-vehicle market in the world and still rapidly growing, is seen as one of the key target markets for Tesla.
Having a plant directly in China would have some major financial benefits for Chinese consumers as well as Tesla.

Currently, China places a 25% import tax on every single Tesla vehicle imported into the country. With a local plant, these import taxes would disappear, meaning large savings for customers and increased commercial mobilization for the company.
Furthermore, a local plant will also mean that Tesla can compete more effectively with other foreign car manufacturers, particularly German ones, who have a strong market share vehicle sales in China.

A local plant will also increase manufacturing time, allowing for more e-vehicle sales.
Reports suggest that an agreement has nearly been reached with the city administration of Shanghai, though as per Chinese policy, Tesla will still need to form a partnership with a local manufacturer before any agreement can be finalized.

Tesla’s decision to construct a new plant comes at an excellent time. China had been considering introducing an electric vehicle quota that would start from 2018. Under these plans, 8% of all vehicles sold would need to be electric. Tesla therefore could be ideally placed to take a more serious e-vehicle foothold in the Chinese automotive market.

Notably, even if Tesla does finalize a new plant, they will still need the same CCC certification as now as all manufacturers, foreign and local need CCC certification for the Chinese market.

For more information about CCC certification in general, the process and the associated costs, please visit our website and our News Section where you will find current updates twice a week.

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